18 September 2010

Bicentenary of Chilean Independence

Today Chile celebrates 200 years of independence. On 18th September, 1810 the first Junta decreed their rebellion against Spain just two days after Mexico had done the same. That year several Latin American colonies followed suit. This came after Napoleon invaded the Iberian Peninsula in 1808 setting off unrest throughout Latin America. King Joao VI of Portugal and his court were installed in Rio de Janeiro by a British fleet and Brazil would never again be governed from Lisbon. The Marquis of Wellesley, later the Duke of Wellington, fought a series of battles in the Peninsula war against Napoleon’s generals winning every one of them and gradually drove the French out of Portugal and Spain. After he won the battle of Waterloo condemning Napoleon to exile some of the British sailors and soldiers who had enjoyed the Napoleonic wars went off to help the Latin American wars of independence. In Chile the flamboyant Lord Cochrane, a Nelsonian seafarer, founded the Chilean navy and his memory is marked every year in an annual celebration at Westminster Abbey to which my wife, herself the daughter of a Chilean Naval Commander, and I always look forward. Cochrane later helped the Brazilians and the Greeks gain their independence and was the inspiration for fictional heroes like Horatio Hornblower and Jack Aubrey. The first President of Chile, Bernardo O’Higgins of Irish extraction, spent part of his youth at school in Richmond, Surrey where he learnt something of the liberal attitudes then prevalent in England. Another annual ceremony is held every year in that town which my wife in her capacity as Vice Chair of the Anglo-Chilean Society likes to attend. One of Bernardo O’Higgins’ first acts as President was to return to London and negotiate a loan of £1 million to help the new nation get started. It wasn’t until 1826 that the last Spanish soldiers were driven from Chilean soil on the island of Chilloe which my wife and I visited for the first time earlier this year.

In a previous blog, Democracy in Chile (23 January 2010) I compared Chile’s constitutional record favourably with that of France since its revolution and Germany and Italy since they became unified nations. But in this blog I’d like to write of Chile's other achievements. Chile is first defined by its unusual geography. Described as the long, thin country its northern border with Peru is at 18° S from where it stretches to 56°S. If you were to position it in Europe, and reverse it to take account of the hemispheres, the north of Chile would be in Mauritania and the south in Scotland. Every type of topography that you would find in such a stretch in Europe and Africa you find in Chile from the driest desert in the world in the north to the fjords in the south.

Though not an island it still has an insular nature bordered by the Atacama desert in the North, the second highest mountain range, the Andes in the East, the seas battled by Magellan and Drake in the South and West. From the Antarctic comes the Humboldt current up the Pacific coast bringing cold waters into temperate zones. This is particularly favourable for the cultivation of wine. The vines are blessed with plenty of sunshine at lines of latitude that in Europe would be very hostile but In Chile are cooled by the cold airs from the Andes and the cold waters of the Pacific. Further, the vines were planted by the Spanish before the phylloxera blight wiped out much of the French vineyards in the late eighteen century, a feature Chile shares with California. The French were forced to restock their vineyards with transplants from Chile. In the early 1980s my wife and I founded the second firm to import wines from Chile into the UK and then the big boys moved in. Now Chilean wine accounts for 8% of the British market.

My wife often complains about the lack of news coverage here on Chilean matters. I tell her she should be happy because the British news media will only cover bad news, not good news. And so it has proved this year. When the Chilean electorate decided that their new President should be billionaire business man Sebastian Piñera and he took over in a peaceful transfer of power from Michelle Bachelet of the Centre Left coalition, who had been in government for 20 years, there was very little coverage. When the seventh most powerful earthquake in recorded history, 8.8 on the Richter scale struck in February there was considerable coverage but less than that of an earlier earthquake in Haiti which had been much less powerful, only 7.1, but had killed many thousands while fewer than 500 died in Chile. However, the Chilean earthquake caused over $30 billion of damage, about 18% of GDP. I wonder how the UK would cope if a single event wiped out 18% of our GDP.

Fortunately the Chileans had put aside reserves of $11 billion from the windfall of higher copper prices. Copper is their principal asset and Chile is the largest producer in the world. The Concertacion in pursuing surprisingly enlightened economic policies built up a sovereign wealth fund from higher prices of copper and other minerals following the Norwegian model. The Norwegians have banked some of the surpluses of North Sea oil while the UK has spent it all on the revenue account. Similarly Chile has one of the leading systems of pension provision which it has developed in a far sighted way while Gordon Brown has dismantled the UK’s previously excellent pension funds.

Since 1960 Chile has improved its productivity faster than the US and from being one of the poorer countries in Latin America is now one of the richest, earthquake aside. Since 1990 it has lifted a quarter of its population out of poverty. This has not been achieved through hand-outs but through entering into more trade agreements than any other nation on earth.

When I first visited Chile in 1980 I was working for a large multi-national corporation which thought, like many similar firms, that if it was so successful in North America with its 200 million consumers why could it not achieve great things in South America with double that population. The reasons then were many including widespread poverty, massive inequalities in income distribution and insurmountable barriers to trade. Under Pinochet, while there had been indefensible violations of human rights there had also been a progressive opening up of trade barriers and from being a totally closed economy in the 1960s and early 1970s it was now largely open with moderate tariffs. Our long term strategy was to pioneer the business in Chile and then roll it round Latin America as other economies opened up and developed.

Looking back over thirty years it has taken longer and has not been without major interruptions. But seeing Latin America as a whole most of it is now democratic and open for business. And for much of that time Chile has led the way.

Chile is again in the news for the wrong reasons. 33 miners are trapped half a mile underground in a copper mine in the north. Rescue efforts are in train but may take up to three months and meanwhile there is the problem of maintaining the men’s mental and physical health. Experts from NASA, experienced in the welfare of men and women in confined spaces for long periods, visited them to offer their assistance. My brother in law acted as their interpreter and tells us that the NASA officials were very impressed and said that the local authorities were doing everything possible.

So how are we celebrating this anniversary? On Thursday we were guests at a reception held at the residence of the Chilean ambassador. The usual empanadas were washed down with excellent Chilean wines. At the reception I met David Soul, the former star of Starsky and Hutch and asked him what was his connection with Chile. He has a passion for the poet Pablo Neruda and plans to make a film of his life. Neruda was the second Chilean writer to receive the Nobel Prize for literature in 1971, the other being Gabriela Mistral in 1945. Colombian novelist Gabriel García Márquez once called Neruda "the greatest poet of the 20th century in any language”. Neruda always wrote in green ink as it was the colour of "esperanza" (hope).

Next week the Anglo-Chilean Society holds its special celebration dinner in one of the great Livery halls. The guest of honour will be the Earl of Wessex, himself a supporter of Anglo-Chilean relations through his association as patron of a Chilean University with British Cultural connections. I wonder if we will be able to get him to perform Chile’s national dance, the “cueca”.